Friday, November 5, 2010

Continuation of: On the issue of conflicts of interest among ranking university officials and university-affiliated foundations

The 2009 CAAR of the U.P. System by COA is highly critical of the U.P. Administration, headed by U.P. President Emerlinda R. Roman for its "inadequate U.P. System Guidelines on U.P.-affiliated foundations." This is especially significant, because COA put the U.P. Foundation on the top of its incomplete list of university affiliated foundations, and the U.P. Foundation itself is headed by none other than President Roman (please click on for a PDF copy of the chapter of the COA report containing the list). The responsibility for the U.P. System's unwillingness to move on several years worth of criticism by COA over the issue of not opening the financial records of these university-affiliated foundations thus begins with the very top management of the U.P. System.

Quoting Section 1, Article XI,  of the 1987 Constitution, COA said that “Public Office is a public trust.  Public Officers must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice and lead modest lives.” 

The 2009 CAAR of the U.P. System furthermore quoted Section 63 of Presidential Decree  (PD) No. 1445 which said that, “Except as may otherwise be specifically provided by law or competent authority all moneys and property officially received by a public officer in any capacity or upon any occasion must be accounted for  as  government  funds   and   government   property. Government property shall be taken up in the books of the agency concerned at acquisition cost or appraised value.”

Hanging on by its fingernails onto a legally unsustainable status quo through an inter-year series of delaying tactics, the current U.P. Administration would hardly win a Most Transparent Government Entity of the Year Award in its compliance with COA demands for more transparency by these university-affiliated foundations.

COA said that although these foundations are registered as private institutions, by the nature of its creation, function and purpose, the inclusion of the abbreviated word “UP” in their registered name and using the UP premises as their place of business, however, manifested a conflicting arrangement and raised questions about their legal status as a separate and distinct entity from the UP, which is a government or public entity by its creation and mandated functions.

Last June 20, 2010 the Diliman Diary had earlier written about the close relationship that the U.P. Foundation had with the U.P. President and the equally close relationship the U.P. Business Research Foundation had with the Dean of the College of Business Administration.

The problem is that both the U.P. Foundation and the U.P. Business Research Foundation have been raising millions of pesos, with no independent oversight, using U.P.'s brand name, prestige, personnel and facilities. At a time when U.P.'s 2011 budget has been slashed by an unsympathetic Aquino administration, U.P. needs to make sure that every single peso or unit of foreign currency raised for and on behalf of the U.P. System does not disappear to "systems losses" and this needs an independent oversight mechanism, such as COA (please see:

But these two foundations actually only represent the tip of the iceberg. COA's 2009 CAAR blows the lid wide open on a host of other university-affiliated foundations also operating without proper oversight. COA's 2009 CAAR said that a U.P. Vice President for Development gave them a partial list of 14 university-affiliated foundations in June, 2009 with ranking university officials who served concurrently as ranking officials in these foundations. To download the list, please click on this link:

But political pressure within the university may be too great for a compromised U.P. Administration or its legal department to act quickly and decisively on controlling the activities of these foundations. The Diliman Diary directly contacted the U.P. Administration on this issue, but was quickly rebuffed, as reported on its August 1, 2010 story (please see:

Nevertheless U.P., in compliance with the previous audit recommendations on the UP- affiliated foundations, has issued a “Guidelines for Recognition of the UP-Affiliated Donor Organizations” with the following information: General Principles, The Need for Guidelines, Criteria for Recognition and the Partial List of Foundations Generally Recognized by UP as Donor Organizations.

COA said the issue on monitoring and transparency of the foundations programs, projects, activities and fund sources that should be regularly reported to the University has not been addressed in the guidelines. The absence of an independent oversight body to monitor the affairs of the foundations would mean giving them full discretion to handle funds supposedly intended for UP as the primary beneficiary, including the generation of revenues without proper reporting and disclosure.

COA said it recognized the foundations’ support and concern to the different activities and programs for the improvement and development of the University in general and the respective Colleges in particular. However, for transparency and accountability, and for the information and protection of the concerned beneficiaries or recipients, proper financial accounting and reporting should be made by these institutions to the UP System.

COA said that it reiterated in the 2009 CAAR (for the Executive Summary please click: its previous recommendations in the 2008 CAAR (for the Executive Summary please click:, 2007 CAAR (for the Executive Summary please click: and 2006 CAAR (for the Executive Summary please click: that the U.P. Administration formalize once and for all an arrangement through a Memorandum of Agreement with these Foundations by defining the functions and responsibilities of both parties, including how to account and share for the income/revenues earned from their operations.

COA said a policy or guidelines must be established to set the limits and boundaries with respect to the role or participation of the UP employees and officers to any of these Foundations.

Financial transactions entered into by these Foundations for and in behalf of the University must be accounted for and reported to the UP System management and be subjected to the COA review, verification and audit.

The U.P. Administration commented that it will address the conflict of interest issue, such that it will inform the foundations that: no head of unit will become an officer of the foundations; and that Faculty members of the unit serviced by the foundations should comprise only a minority of the Board Membership.

However, the COA report was silent on whether U.P. President Emerlinda R. Roman, who concurrently headed the U.P. Foundation, as stated in the 2009 CAAR, would resign her position within the U.P. Foundation in order to set the example with al the other university-affiliated foundations.

To return to the main story, please click here:

No comments:

Post a Comment